Interview with Sebastian Chwałek, President of the Management Board of the Polish Armaments Group (PGZ).

In July, the Polish Armaments Group (PGZ) signed the biggest contract in its history with the Ministry of National Defense on building three frigates. Will it be possible to avoid the mistakes made in the Gawron program?

The Miecznik program is a challenge for the entire Polish defense industry, since several dozen suppliers from outside PGZ will be involved in its execution. However, I am optimistic about the program’s successful outcome. The very scale of the undertaking and the methods of its execution significantly differ from the Gawron program. It is true that ORP Ślązak was introduced into service 18 years after signing the contract, but the actual building of the ship took no more than 4.5 years. The program dragged on because it included long periods of the so-called “no-input financing,” which basically means there was no money. On top of that, the vessel’s design was changed significantly while it was already in the process of building. Ultimately, a patrol ship was built instead of a corvette. When it comes to the Miecznik-class frigate, we will closely cooperate with the project supplier indicated by the Armaments Inspectorate. There are at least three foreign tenderers: from Great Britain, Spain and Germany. They all have a lot of experience in designing and building ships of this class. The companies from Spain and Britain are currently executing contracts for vessels similar to the ones offered to Poland. We also have clearly specified tactical and technical guidelines for the future frigate. These assumptions can undergo only slight modifications connected with choosing a particular project.

Another challenge for PGZ will be Narew – the short-range air defense missile system.

The Narew program will be more expensive and more complicated than Miecznik. It isn’t limited to a several-year-long period of deliveries of a chosen anti-aircraft system. It also covers servicing, repairs, development and modernization within the several dozen years of the product’s life. In Narew, we will closely cooperate with a foreign supplier of the missile technology. There are at least two tenderers interested in working with us. I want to emphasize, though, that a significant part of the system’s elements will be produced in Poland. For PGZ, this program is not only a technological, but also an organizational leap forward. That’s why we are already preparing for it. Similarly as in the case of Miecznik, also private companies will be engaged in the execution of the Narew program.

The announcement about procuring 250 Abrams tanks raised some controversy. Do these plans really mean giving up on the Wilk program, which was to involve producing a new tank in Poland?

These are two different ways of procuring armament. Abrams tanks are to equip only four battalions of tanks, out of over a dozen that we have in the land forces. These tanks are to be procured as part of an urgent operational need and delivered to the army in the next few years. The contract with Americans doesn’t close the question of the new tank, as the army still needs 600–700 more of them, together with assault bridges and engineering equipment, in order to ultimately replace all T-72s in the 2030s, and Leopards in the 2040s.

Is there any way to launch the production of a new tank in Poland in a time perspective that would be acceptable for the army?

One possibility is to start cooperation with a foreign entity indicated by the MoND, which has a ready tank. Such talks are conducted on the level of industries. Another possibility is to include Poland in a foreign program aimed at building a new generation tank. I think we would be able to prepare our own design relatively quickly, but we would have to import some components, the propulsion system in particular. I hope that the Polish Armed Forces will soon decide on the best method of procuring a new tank within the Wilk program.

When will the new Borsuk infantry fighting vehicle be available?

The project is almost complete. At PGZ, we are literally counting months to the formal completion, which first requires testing the chassis itself and the ZSSW-30 turret as well. We would like the serial production of Borsuk to start in 2025. I hope we will be able to deliver a batch of the vehicles to the army earlier, in order for line units to run some tests and for us to collect opinions from the future users.

The downside of the project is that it only covers the combat version of the vehicle.

We are trying to solve this problem. PGZ is getting ready – if the MoND makes concrete decisions – to quickly submit proposals regarding specialist variants of Borsuk, so as to avoid the mistakes made in the past with KTO Rosomak.

Regardless of these mistakes, the Rosomak program is considered a success. What is the future of these vehicles?

Rosomak will remain an advanced vehicle for several years to come. There is an open MLU [Mid-Life Upgrade] option. I am counting on its successor – the Serwal program – to accelerate, so that the vehicles could be delivered to the army by the end of the next decade, when Rosomaks reach their thirties. I hope the change in the system of procuring armament and military equipment, announced by the minister of defense, will positively influence this program.

Returning to Borsuk vehicles, is PGZ ready for mass production?

We estimate that annually we would be able to deliver equipment for one battalion.

Are you considering moving the production of some vehicles outside HSW [Huta Stalowa Wola] if the MoND’s orders are larger?

Yes, we are. There are a few important issues, first of which is the plant’s production capacity. Purchasing machines is not enough to quickly increase this capacity. The limitations are created due to the lack of qualified employees. Another issue is the security of production in the event of threat. That’s why we are working on its multiplication at some of our plants. As a Group, we have a similar production capacity [to HSW] in various locations, such as Śląsk. The production of components, or even some specialist versions of Borsuk, could be taken over by, for example, OBRUM in Gliwice.

We have ordered Turkish drones. What about your UAV projects?

The Bayraktar TB2 combat system was ordered by the MoND as part of an urgent operational need. PGZ, on the other hand, is executing programs on tactical UAVs. One of them is Orlik. Test flights of the modified platform started in the second half of August. There is also a chance that the contract regarding the Wizjer mini-UAV program will be signed soon.

For years, PGZ has also been engaged in the work on the BMS [Battlefield Management System]. What is the current situation of this project?

We are conducting intensive negotiations with the MoND, and, if everything goes according to plan, by the end of this year we will sign a contract on BMS, which in the first place will be installed in Rosomaks.

Such extensive programs require good organization. What has changed in the Group in that area?

We are trying to create an organizational structure that will provide us with capabilities to execute specific projects for the MoND. An example of such a move was combining military aviation works which specialized in servicing the same equipment. WZL No. 2 dealt with airframes, and WZL No. 4 with aircraft engines. Once they became one entity, many barriers hindering cooperation were lifted. We also have to restore some competences lost by our defense plants as a result of many years of underfinancing and lack of decisions on launching new projects. In order to gain such competences, we need investments. We already have an important asset in the form of experienced managerial staff at most companies, as well as highly qualified crews.

Autosan is getting pretty bad press. What will be the future of this company?

Currently, Autosan has capabilities to produce buses with various drives, but they also build, among other things, elements for launchers within the Wisła program. We want to include Autosan in military projects more extensively. In the near future, they are to start producing a high mobility and increased loading capacity vehicle, which might be offered for the Pegaz program.

Why is HSW, which already has Autosan, also taking over Military Engineering Works [Wojskowe Zakłady Inżynieryjne] in Dęblin?

Taking over the works in Dęblin by HSW is a natural process connected with the necessity to expand its production and servicing potential. In the latter case, many new products, such as Krabs or Raks, will soon require servicing, while the plant in Dęblin doesn’t have as much work as to have a problem with taking on new tasks.

Limited export has been the weakness of PGZ for years. What are the barriers blocking its increase?

Export on the level of about one billion zlotys a year is unsatisfactory. I think we would be able to double, or even triple it, but not overnight. One of the barriers that hinder Poland’s entrance to foreign markets is the limited production capacity of our plants. License limitations from foreign suppliers are a noticeable problem as well. There are also political issues, which are crucial, but clearly underestimated in Poland. For many countries, procurement of armament is often an element of more extensive cooperation and alliances. Despite all these limitations, we might actually sign some interesting contracts soon. If our customers require it, we are ready to launch production outside Poland.

What was the impact of the pandemic on the functioning of PGZ?

We felt the absence of workers, but we didn’t have to discontinue production. The pandemic exposed the weakness of international delivery chains. We had to wait for months to get parts for production or servicing which had earlier been delivered on the next day. Because of such experiences, we are now more inclined to consider producing some of these parts in Poland. We have already signed a contract on producing cannon barrels for Leopards at HSW. It’s possible that we will soon expand our offer with barrels for the T-72 and other components.